Companies Squeeze 401K Plans From Facebook to JPMorgan [View all]

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http://www.bloomberg.com/news/2014-02-14/companies-squeeze-401-k-plans-from-facebook-to-jpmorgan.html

Employers are squeezing their workers’ retirement savings, holding back on both the amount and the timing of 401(k) matching funds and dragging out vesting schedules. Taken together, these measures are making it more difficult to save for old age.

Major companies that have engaged in such practices in recent years include Whole Foods Market Inc., Facebook Inc., Oracle Corp., Caesars Entertainment Corp. and JPMorgan Chase & Co.

The most frugal have been scaling back company matches and setting lower limits for the maximum annual payment they’ll make to a 401(k) account, according to hundreds of government filings analyzed by Bloomberg. A difference of three percentage points on a match can add up to hundreds of thousands of dollars lost for employees over the course of their careers.

“There’s been an implicit contract for years and years -- workers save and companies match -- but now they’re changing the rules,” said Brigitte Madrian, a Harvard Kennedy School professor who studies retirement policy and corporate management. “Most individuals can’t do it on their own. We’re going in the wrong direction.”